‘Showrooming’ is adding to, not taking away from, store sales

By Bill SiwickiEditor, Mobile

A Deloitte study shows smartphones are having a positive effect on store retailers.

Smartphones will influence 19%, or $689 billion, of U.S. retail store sales by 2016, according to “The Mobile Influence Factor in Retail Sales,” a new study of 1,557 smartphone owners from research and consulting firm Deloitte. Smartphones already influence 5.1% of all retail store sales in the United States, which translates into roughly $159 billion in annual retail sales this year, Deloitte predicts.

61% of smartphone owners who use their devices to shop have done so in a store, the study finds. The Deloitte research indicates consumers’ in-store mobile activities are contributing to, not taking away from, in-store sales, and that smartphone shoppers are 14% more likely to convert and make a purchase in the store than non-smartphone users. This means that mobile is an important tool for retailers to drive incremental in-store sales, Deloitte says.

This conclusion runs counter to the widely discussed theory that consumers increasingly are using physical stores as showrooms where they can learn about and see products in person, and then make purchase from a competitor online or through mobile commerce. The Deloitte study concludes that many shoppers are using their smartphones to enhance their store shopping experience, not to use a store as a showroom for online retailers.

“Consumers want to interact with you—evidenced by the 34% of shoppers surveyed that used their smartphone on their last shopping trip to use a retailer’s mobile app or site,” says Kasey Lobaugh, multichannel retail practice leader at Deloitte. 85% of consumers who used a retailer’s mobile app or site during their most recent shopping trip made a purchase that day in that store, compared to only 64% who didn’t use the retailer’s app or site, Lobaugh adds.

48% of smartphone owners who use their devices for in-store shopping say their devices have influenced whether they purchased an item in a store, the study finds. And many of them are using mobile apps: 37% of smartphone owners surveyed who used a smartphone on their last shopping trip used a mobile shopping application from a source other than a retailer, and 34% used a retailer’s mobile app, Deloitte says.

Smartphone-toting consumers appear more likely to make a purchase than those who do not own one or do not use one to assist in-store shopping. 72% of smartphone owners surveyed indicated they made a purchase on the day of their latest shopping trip, compared with 63% of respondents who did not use a phone. Smartphone users were also more likely to eventually make a purchase: Among those who did not buy anything on their last trip, 59% of those who used a smartphone eventually made a purchase, compared with only 22% of those who did not use a phone, Deloitte finds.

“Retailers that do not engage shoppers through specialized mobile applications or targeted smartphone-based promotions leave the door open for competitors to reach a customer who is standing in the retailer’s store and at the point of purchase,” Lobaugh says. “To make the connection with consumers, retailers need to understand how mobile shoppers are willing to interact with their specific store category, format and merchandise, both inside and outside the store, and customize their mobile strategy around the shopper’s needs and experience.”